Community schemes must transform or be forced to so by the government

Johannesburg - The government has stirred up a hornet’s nest by saying that emerging black SMMEs must benefit from the country’s multitrillion-rand community schemes economy or it would be forced to impose changes.

Political parties this week railed against the threat and vowed to seek legal advice if needed.

Lesiba Seshoka from the Community Schemes Ombud Service (CSOS) warned that community schemes should transform voluntarily or be legally obliged to do so.

“We can’t transform the economy if we don’t transform these schemes,” he said.

Seshoka said it was a “pressing matter” and that the country was sitting on a “time bomb“ because the poor were not benefiting from the changes in the country.

“We are living in a society where the gap between the rich and the poor is so big and I think we are sitting on a revolution and we don’t have to wait for a rebellion from the poor to happen before we take steps. We have to be proactive.”

He said they had hoped the private sector would follow the example of the public sector in terms of promoting representativity, but it hadn’t happened.

Last week Human Settlements Minister Mmamoloko Kubayi said the estimated 70 000 community schemes, which include sectional title complexes, homeowners’ associations, retirement housing schemes, share block companies and housing co-operatives, were increasing rapidly because of urbanisation and a growing (especially black) middle class.

“The scarcity of land in urban centres, security concerns and convenience of community schemes have made them an attractive option for many middle-class people.”

She said 27% of the total value of residential property was from organised communities, which made community schemes a significant economic sector and a major contributor to job creation especially for SMMEs.

“I am speaking of services such as security, garden services, audit services and managing agents. This means we have a responsibility to transform this sector and make it more inclusive.”

Services, she said, were often sourced from companies that “are known” to scheme managers, who apparently brought in family members and close acquaintances, making it difficult for others to break into the market.

“For the sector to transform, this and other practices need to change. We need to put measures in place to ensure that a procurement approach that gives opportunities to emerging black SMMEs becomes mandatory.”

Community Associations Institute of South Africa vice-chairman, Johan Kruger said it would be difficult for the government to implement such a policy.

It was the first time he had heard of a high-ranking government official suggesting introducing a procurement policy for gated communities.

“The trick is, how is she going to enforce this? It will be difficult to police,” he said.

Kruger pointed out that unlike government institutions, estates were run as non-profit companies and levies were paid by residents from their post-taxed salaries. This would infringe on rights of choice. However, Kruger did point out that many estates already had a procurement policy that involved BEE.

“She has put it out there, so the industry will have to discuss and see how it will be implemented.”

This week the DA condemned what the minister said at the CSOS Indaba, calling it another attempt by the ANC to use BEE as a vehicle for looting and political capture.

“It is completely ludicrous that they want to dictate how to do their services, particularly for the residents that are within those units. This is why we want to understand exactly how they have come to this particular decision,” said DA human settlements spokesperson Luyolo Mphithi.

Mphithi said the DA had submitted a Promotion of Access to Information Act (PAIA) request to obtain details of Kubayi’s conversations with her director general and possible plans to introduce procurement policies for gated communities.

“We need to understand how she came to the decision and we will be taking legal opinion and advice,” he said.

Afriforum said it was “strongly opposed” to the racial transformation of private service delivery at community housing schemes. The organisation’s local government adviser, Petrus Coetzee, said they would carefully monitor and fight the process if necessary.

He said the procurement process for the appointment of contractors at state institutions, where black economic empowerment was a major requirement, was not always as effective, leading to poor service.

“The total municipal decay in the country testifies to incompetent and unqualified municipal contractors.”

The Saturday Star